Gather Little by Little - Personal Finance with a Christian Perspective » Reader Questions http://www.gatherlittlebylittle.com Proverbs 13:11 - "...he who gathers money little by little makes it grow." Mon, 15 Mar 2010 11:00:59 +0000 en hourly 1 The Friday Gathering Ask the M-Network Edition http://www.gatherlittlebylittle.com/2009/01/the-friday-gathering-ask-the-m-network-edition/ http://www.gatherlittlebylittle.com/2009/01/the-friday-gathering-ask-the-m-network-edition/#comments Fri, 09 Jan 2009 12:01:47 +0000 glblguy http://www.gatherlittlebylittle.com/?p=1270 250ask

The M-Network is starting the year off with a bang by beginning something that I think is really awesome: Ask the M-Network.  Have a personal finance question you’ve been wanting to ask? Ask the M-Network will not only give you a chance to ask the question but give you potentially 8 different answers with 8 different perspectives!

To Ask the M-Network, submit a personal finance question to any of the M-Network members using the sites contact form on any M-Network member’s blog. Your question could be answered by several M-Network members and published within a few days on the blog where you submitted the question.

You”ll also note that I added an Ask the M-Network graphic to my sidebar as well.  Clicking on this will take you to my contact form page where you can submit your question.

Just a few things to make the lawyers happy:

  • Our answers are opinions not professional financial advice – Please remember that we are personal finance bloggers and not finance professionals. Our answers should not be considered professional advice and we assume no responsibility of any kind. Please consult a certified financial expert as needed.
  • Not all questions will be answered – We will only answer selected questions. If your question is answered, you’ll also be notified via email with a link to our responses.
  • Questions will be answered publicly – The questions and answers are considered property of the M-Network. Once published, you cannot ask us to remove the question. Please note, we retain the right to reuse the questions and answers any way we choose.
  • Your identity is safe – Please note that we will not publish your full name or email; we will refer to you by your first name or any name that you give us.

More important Stuff:

The Gathering

Now for my favorite personal finance reads from the M-Network and beyond:

Blog Traffic Exchange Related Posts ]]> http://www.gatherlittlebylittle.com/2009/01/the-friday-gathering-ask-the-m-network-edition/feed/ 4 College money all at once or allotted over time? http://www.gatherlittlebylittle.com/2008/08/college-money-all-at-once-or-allotted-over-time/ http://www.gatherlittlebylittle.com/2008/08/college-money-all-at-once-or-allotted-over-time/#comments Thu, 14 Aug 2008 10:07:16 +0000 glblguy http://www.gatherlittlebylittle.com/?p=974

I received a very interesting question from a reader this week. Marsha asks:

If a child has money given to them for college, should it be
literally given to them, or slowing allotted to them? Please explain the
answer. Seeking wisdom….

Well, I’m not sure if I would be considered wise or not, but I certainly have an opinion and here’s what I would do:

I would allocate it over time. As I read your question, the wisdom of Luke 16:10 came to mind:

Luke 16:10 – “Whoever can be trusted with very little can also be trusted with much.”

While most of us are adults when we get to college, we’re young adults and in many cases new at managing large sums of money and still somewhat immature when it comes to life in general. The primary reason I would allocate it is to help the student manage the money.  The temptation for a young student to use those funds for things other than college is just too great. Having been a young college student a few years back (okay, maybe more than a few years), I wasn’t financially mature enough to manage a large lump-sum of cash.  Help them become trusted with with “very little” first so they can manage much later.

Managing the college funds

Here’s how I would manage and allocate the college funds:

  • Work with the student and involve them so they can learn – Make sure that you involve the student in each and every step of the process.  This is a great opportunity to help them learn to manage a large windfall of cash and teach them how they can make the money work for them in the short term.  This is also a great opportunity to help them create and follow a budget and learn how to allocate out the money to last the duration.
  • Make a budget – Lay out how the money will be spent on a month to month basis.  I would go ahead and do this for the full 4/6/8 years, based on the type of degree they are getting.  Things to include are: tuition, housing, food, books, computer, furniture, gas, etc.  Work with the student to come up with the various different expenses and allocate money to them.  Doing so will help you identify whether the money is enough, where you may need to cut-back or maybe even where you have excess.  The budget will drive how money is allocated to the student on a monthly or weekly basis.
  • Determine where the money will be kept – This depends on the age of the child now.  For a younger child that is still a few years away from college, I’d place the money in a high-interest bearing CD.  If the funds will be immediately required, than I would place the money in a high-interest bearing savings account.  I would also establish a checking account, and set-up an auto-transfer to the checking account.  I would not place the college money in the students name, this is again to avoid temptation.
  • Consider any tax implications – You didn’t specify the amount, but I would make sure you consult a tax professional to understand any tax implications as well.  I’m not a tax expert at all, and there may not even be any implications, but it surely wouldn’t hurt to understand this so you aren’t caught off guard down the road.

A blessing

With all of that said, I think it’s awesome that you are having to ask this question!  Having been someone that worked some of their way through college, what a blessing to have college expenses paid for!  Make sure your child/student understands how great of a blessing this is and the opportunity this gift provides.  Going into a career student loan free, and with a fully paid for education will really give them a head start financially.  Make sure they take advantage of the opportunity.

Thoughts from readers

Thanks for the question, and I hope I’ve provided some “wisdom” as requested.  I’d like to ask my readers to chime in as well: Do you agree with my take?  What other considerations have I missed? Add a comment and help Marsha out!

Photo by: brunkfordbraun

Blog Traffic Exchange Related Posts ]]> http://www.gatherlittlebylittle.com/2008/08/college-money-all-at-once-or-allotted-over-time/feed/ 15 A reader question: Budgeting and reminders http://www.gatherlittlebylittle.com/2008/06/budgeting-and-reminders/ http://www.gatherlittlebylittle.com/2008/06/budgeting-and-reminders/#comments Wed, 04 Jun 2008 10:00:38 +0000 glblguy http://www.gatherlittlebylittle.com/?p=795 I have a question
Photo by: pfly

I recently gave my readers an opportunity to ask me pretty much anything they wanted and that they did. I’ll be answering all of the questions I received so far in an article next week; however, I did received one question that was on a big enough topic to address as an article of it’s own. A reader, I’ll name Liz, send me the following email:

I am great at making budgets. I can make the most high-tech, fancy looking budgets you’ve ever seen with Excel. That’s not the problem. The problem is: I seem to be completely incapable of following them. I am constantly adjusting & re-adjusting our money. I don’t know if it’s our income ($32,448 for a family of 4), ADHD, or a complete lack of self-discipline. The truth is probably a combination of all three. I’m able to have self-discipline sometimes but not so much at others. I’m famous for putting a system in place to keep track of the bills that need to be paid but then forgetting to use the system! I’m also famous for organizing coupons then forgetting to take them with me or, when I do take them with me, forgetting to give them to the cashier! I’ve been driving around with several brown paper bags in my truck because Ukrop’s gives you 5 cents off for each bag and every time I go there, I forget to take them in with me.

My first thought after reading this email was “Wow, that sounds EXACTLY like me.” In particular, the issue of forgetting to bring the coupons and forgetting to use them. I am famous for both of these. This is really a great set of questions and one’s that I would suspect a number of people struggle with, especially in today’s world we all constantly seem to have a million things to do and not near enough time to get them all done.

How to follow a budget

The first part of the email really asks: How do I follow my budget? Liz really answers her own question: lack of self-discipline. Liz, let me make you feel better, this is an extremely common problem and one that I struggle with myself.  The issue isn’t lack of desire but more of a problem of being “out of sight, out of mind”. I don’t think income is the problem, and honestly have that level of income and a family of 4 should drive you to really focus on staying within your budget, as your budget has to be tight. So let’s look at a few things I do to help address similar issues:

Have an accountability partner

I didn’t see you mention a husband, but will assume since you say “family of 4″ you are married with two kids. I also saw lots of “I” and no “we” which makes me think your husband isn’t engaged in your personal finances.  In order to strengthen our self discipline, my wife and I utilize each other as accountability partners. We do our finances together and review our budget and status weekly. During that meeting we review our current spending, discuss remaining budget amounts and where we are tight and where we aren’t and also establish our budget for the up coming month. We also use this time to discuss any unbudgeted expenses and decide if we should spend the money or not…together.

Once we’ve completed our budget, we do a silly little pinky shake to convey our commitment to each other to not only follow the budget, but to hold each other accountable for staying within the budget. This accountability system has been very effective for us.

Review the budget frequently

Many readers have commented in the past that a weekly budget meeting is too frequent. I disagree. The main advantage of reviewing the budget at least weekly is keeping it fresh in our minds. By reviewing it weekly, both of us know the status, know how much remaining money we have and understand exactly where all of the money is going. Discussing it weekly also increases the accountability and stresses the importance of staying focused and within the budget we mutually agreed to.

Constantly adjusting & readjusting

You mention that you are constantly adjusting and readjusting the budget. This isn’t necessarily a bad thing as long as you are still spending less than you earn; however, it is a sign that maybe you aren’t spending enough time planning your budget.

At the end of the month, my wife and I use our budget review meeting to set the budget for the next month. I work up the draft budget, then we review it together. She adds in upcoming expenses I missed or wasn’t aware of.  We also make tweaks and determine how to much to put on our credit cards vs. savings.

I honestly don’t think I’ve had a month go by where I didn’t have to tweak the budget numbers a few times, but it’s not excessive tweaking. This is a result of us placing a big focus on setting the budget up correctly BEFORE the coming month and really planning out our expected income and expenses.

Constant Reminders

Now that we’ve discussed some ideas on how to follow the budget, let’s discuss how to remember things like bills, coupons, etc. I am one of those “out of site out of mind” people, so I surround myself with reminders. I do things that some people might call a little crazy, but they work for me. Here are just a few suggestions that will help you get thinking “out of the box”.

Automate

One of the first things people like us you and I should do is automate everything as much as possible. All but maybe one or two of my bills are set-up in online bill pay and paid automatically. I don’t even have to think about them, they just get paid based on the payment schedule I set-up. For the bills that are variable each month or can’t be automated I do two things:

  1. I add a reminder in online billpay about due bills. The online billpay system I use from my primary bank sends me an email when a bill is due. As soon as I read the email, I login and schedule the payment to be made. I do this immediately.
  2. I set up a Google Calendar reminder a day or two after the bill pay reminder to remind me again to pay the bill. This handles the situation where I get slack and don’t go pay the bill immediately when I receive the first bill pay reminder.

I am a firm believer that it’s really hard to change who and what you are. Habits can be changed overtime, but I believe who you are at the core is really who you are. So instead of trying to change who you are, just accept it and address the issues.

Personally, I forgot stuff and I procrastinate all the time. I’ve been this way for as long as I can remember, and I’ve accepted I am not going to change. So I just put things in place to mitigate these little difficiences like I described above.

Remembering Coupons

I truly laughed out loud when I read Liz’s comment about bringing coupons to the store and forgetting them. I used to do that all the time, to the point my wife was actually getting quite frustrated with me. I needed to come up with a way to remember the coupons and remember to use them. Maybe my method will help you.

There are two things I always remember to bring to the grocery store: a shopping list and my wallet. What I started doing was clipping the coupons to the list, then once in the store I’d move the coupons from the list to my debit card. I had to pay using my debit card, so having the coupons clipped to the debit card made it impossible for me to forget to use them.

Remembering other things

The trick to remembering things is to place them in a spot where you can’t miss them. For example, the paper bags: next time you are heading to the store, place the bags in the passenger seat, or on the dash. If you have a pocket book, put your pocket book on top of the bags.  Hard to forget them now huh?

Instead of being frustrated with your problems, just find creative ways to work around them!

Here are a few articles I’ve written that will provide some more detail on the items I’ve mentioned above:

Thanks for the great question!  For the rest of you that asked questions, I’m working on them and will have answers next week to all of them.  Do you have any additional advice for Liz?  Share your advice, suggestions or ideas by adding a comment!  Have a question for me?  Drop me a line and I’ll do my best to answer it.

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